Forbes CommunityVoice™ allows professional fee-based membership groups ("communities") to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform. Each topic-based CommunityVoice™ is produced and managed by the group.

Opinions expressed within Forbes CommunityVoice™ are those of the participating individuals.

Dec 15, 2017, 09:45am

Tech Startups Everywhere Are Terrified Of Amazon HQ2 -- They Shouldn't Be

The bids are in. A total of 238 cities are now waiting for Amazon to announce the location of its second headquarters early next year. Mayors and other politicians are eager to land the prize, especially for the 50,000 high-paying tech jobs Amazon promises to create in its city of choice.

Many tech entrepreneurs, on the other hand, are terrified at the thought of their city winning the Amazon sweepstakes. They think a behemoth like HQ2 will dislocate their local tech ecosystem: Amazon will be at the top of the food chain from the day it arrives and will eat everything in sight. The interloper will suck up all the best talent, leaving local innovators -- whether new startups or scaling firms -- to scavenge for scraps.

I often hear this opinion voiced by my tech community colleagues here in Toronto where I live and work. From my business travels, I’ve heard the same opinion from entrepreneurs in other bidding cities.

The thing is, they’re all wrong.

It’s true that Amazon’s arrival would be a game-changer for local tech entrepreneurs in every bidding city. Some firms’ survival will be threatened, particularly in the short term. Some entrepreneurs will be upset to discover they’re not the biggest fish in their pond anymore.

But the reality is that Amazon’s HQ2 won’t create some kind of black hole for recruitment. It’ll do the opposite: Amazon’s city of choice will turn it into a magnet for local and global talent. Local graduates who’d previously left for Silicon Valley will return or choose to stick around. Ambitious engineers and computer scientists from around the world will relocate there. Yes, local firms will have to compete with Amazon to lure and retain the best talent, but the talent pool to choose from will be so much deeper and wider.

Toronto is a perfect example of how Amazon would reinvigorate the local ecosystem rather than decimate it. At one local university with a reputation for excellence in technology, the University of Waterloo (my alma mater), more than 4,000 of its STEM graduates in the last decade have relocated for jobs outside of Canada. Many are co-op students who do their senior-year placements in places like Seattle or Silicon Valley, meaning they’ve already got one foot out of the country before they even graduate.

If Toronto were to land HQ2, the net result would be thousands of more engineers pursuing their careers locally and circulating in the community. Many talented expats would decide to return home. A critical mass of senior executive positions would be created, affording the local tech ecosystem the opportunity to develop and season its own executive talent in the long run.

The best companies in the ecosystem will have no trouble competing for talent with Amazon (I know Top Hat won't). What an Amazon HQ will do is increase the size of the talent pool and raise the bar.

What’s more, Amazon’s aggressive, high-growth corporate culture would rub off on every other local player. One of the biggest challenges ecosystems have is that entrepreneurs don’t think big enough. They sell out early and don’t know how to build an aggressive, high-performance culture. Amazon will raise everyone’s game to the point that Toronto, or whichever city Amazon chooses, will become a global pace-setter, generating more startups and more high-growth unicorns.

By contrast, the Trump administration’s hostility toward immigration is becoming a major headache for the tech industry, particularly in its efforts to clamp down on H-1B visas, which are used to import talent from India, Canada and elsewhere. It’s no secret that the U.S. tech industry depends upon engineers from around the world, bringing in tens of thousands of them annually (Microsoft and Google both sponsored more than 4,000 H-1B visa applicants last year alone). So if U.S.-based tech firms are concerned about finding talent, including those from Canada's Waterloo University, they should worry about it being blocked from ever entering the country in the first place.

What they shouldn’t worry about is the day that Amazon sets up HQ2 in their backyard. I’m certainly not losing sleep over it, and if Toronto ends up winning, I’ll be elated. Whichever city is chosen to host HQ2 is in for a wild ride. Their local tech scene will quickly get more competitive, more aggressive, more talented, more innovative and more global. Entrepreneurs are supposed to dream big and think big. Any tech firm that can’t welcome Amazon’s HQ2 to their city has already begun thinking small.

Forbes Technology Council is an invitation-only, fee-based organization comprised of leading CIOs, CTOs and technology executives. Find out if you qualify at forbestechcouncil.com. Questions about an article? Email feedback@forbescouncils.com....